Indonesia-based HappyFresh announces Series B round, leaves Philippines and Taiwan
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HappyFresh, the Jakarta-based grocery delivery platform, announced yesterday it has raised an undisclosed Series B round while also revealing it will be consolidating operations and pulling out of the Philippines and Taiwan.
The round was led Dubai-based private equity firm Samena Capital, with HappyFresh CEO Markus Bihler said a major reason for the partnership was Samena’s status as a leading investment firm for logistics.
“Number one, given that our business is, to a significant extent, a logistics business, we feel the support on logistics is very value-add,” said Bihler.
“And number two, they are a classic large-cap private equity firm with significant ties to offline retail, which is the second arm of the HappyFresh business,” he said.
Other participants in the round were Vertex Ventures, the venture-arm of Singapore’s Temasek Holdings, Sinar Mas Digital Ventures of Indonesia’s Sinarmas Group and Endeavor Catalyst, a New York-based venture arm of Endeavor Capital.
The fundraising, which was larger than the US$12 million Series A the company raised in September 2015, remains undisclosed in large part because Bihler said it brought unnecessary attention to the number.
In regards to the decision to pull out of the Philippines and Taiwan, Bihler said a crucial goal for HappyFresh is to focus on its core markets.
“I believe that companies who are profitable and independently sustainable are companies that last, and therefore can continue to serve, in our case, the end customers and offline retail partners,” he said.
“Number one, given that our business is, to a significant extent, a logistics business, we feel the support on logistics is very value-add,”
The decision to consolidate the company to Indonesia, Thailand and Malaysia was a fast decision. It comes six months after the company entered the Philippines back in March and less than a year since it launched in Taiwan.
“What we have decided is we will focus our effort on the three core markets that we have chosen to operate in, which is Indonesia, Malaysia and Thailand,” said Bihler.
Because HappyFresh puts emphasis on the role of logistics in the decision to go with Samena Capital, e27 asked Bihler to provide some details as to how that looks on-the-ground.
“I think if I go back and look at what HappyFresh is, we are a digital marketplace for offline retailers on the front end. And on the backend we are a digitally enabled fulfillment operation. So the largest efficiency gains that we have seen historically, and I am very sure that we will see in the future, is driven by technology,” said Bihler.
This means intelligent use of routing, the increase of prediction software, and more efficient usage of resources (the time and availability of the shopper and drivers in the company).
HappyFresh was founded in October 2014 and began operating in March of 2015.
Its operating model is similar to that of competitor honestbee — in which shoppers visit specific grocery stores and shop for the consumer before the food is delivered. As a comparison, another grocery delivery player, RedMart, has its own warehouses and thus does not ‘shop’ for customers.
Questions & Answers
Q.Which specific markets will HappyFresh now operate in?
Which specific markets will HappyFresh now operate in?
HappyFresh has chosen to consolidate its operations and will now focus its efforts on three core markets. These markets are Indonesia, Malaysia, and Thailand.
Q.What was the main reason HappyFresh chose Samena Capital as the lead investor for this funding round?
What was the main reason HappyFresh chose Samena Capital as the lead investor for this funding round?
CEO Markus Bihler cited two main reasons: Samena's status as a leading investment firm for logistics, which is crucial for HappyFresh's business, and their ties to offline retail, which forms the second arm of HappyFresh's business.
Q.Why did HappyFresh decide to pull out of the Philippines and Taiwan so soon after launching?
Why did HappyFresh decide to pull out of the Philippines and Taiwan so soon after launching?
The company decided to consolidate its operations to focus on its core markets. CEO Markus Bihler stated a crucial goal is for companies to be profitable and independently sustainable to last.
Q.How does HappyFresh's operating model compare to RedMart's?
How does HappyFresh's operating model compare to RedMart's?
HappyFresh's model involves shoppers visiting specific grocery stores and shopping for consumers before delivery. In contrast, RedMart operates with its own warehouses and does not 'shop' for customers.
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